Mistakes to Avoid When Dealing with Consumer Debt

Many residents of the Chicago area find themselves with medical debt, credit card debt, and other forms of consumer debt. According to a recent article from U.S. News & World Report, dealing with debt is a typical experience for most Americans. On average, according to NerdWallet.com, “the average American household has $15,310 in credit card debt and has $132,086 in overall debt.” While facing significant debt may be common, it does not necessarily make it any easier. For many debtors, personal bankruptcy can help to alleviate the stress associated with unmanageable debt.
Whether you are considering filing for consumer bankruptcy or taking steps to get out of debt through other means, the U.S. News & World Report article cites frequent mistakes made by debtors as they try to get their finances in order. What mistakes should you avoid as you work to get out of debt?
1. Do Not Assume that There is a “Quick Fix.”
There are many debt-relief programs being advertised on the internet, and companies may offer to help you get out of debt quickly and without any serious ramifications to your financial profile or your credit rating. While there are some legitimate credit counseling services and government programs that can help consumers to manage debt (and, hopefully, to pay it off eventually), many of these debt-relief companies scam debtors who are in need of financial help.
What should you do to avoid the mistake of getting wrapped up in a fraudulent debt-relief program? Simply do not assume that there is a “quick fix” to getting out of debt. Even for Chicago debtors filing for Chapter 7 bankruptcy, bankruptcy law is complicated and, although you may end up with a discharge of all of your debts, it is always important to work with an bankruptcy lawyer who has experience with cases like yours.
2. Do Not Avoid Reading the Fine Print in Debt-Consolidation Agreements
Whether you are considering working with a legitimate credit counseling operation that can help to consolidate your debt. For example, if you transfer balances to a single credit card to consolidate debt or take out a home equity loan, be certain that you understand the terms of your monthly payment and any associated fees. In some cases, the fees connected to debt consolidation can be quite hefty.
3. Do Not Assume Your Spending Habits Will Change Automatically
For certain debtors, the balances they owe resulted from unexpected expenses or medical issues. However, a lot of credit card debt has to do with the debtor’s spending patterns. If you do find a workable solution to getting out of debt, you need to take steps to ensure that your spending habits change so that you will not find yourself back in the same situation in a matter of months or years.
If you file for Chapter 7 bankruptcy and have your debts discharged, it is important to rebuild your credit and to avoid poor spending habits that could result in unmanageable debt.
Contact an Oak Park Bankruptcy Attorney
If you have questions about managing your debt, an experienced bankruptcy attorney in Oak Park can assist you. Contact the Emerson Law Firm today to discuss your options.
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